Reflections on the AEC business

“After devoting my entire career – since getting out of grad school at the ripe old age of 22 – to the AEC industry, I have had plenty of time to reflect on where we’ve come from and where we are going.”

After devoting my entire career – since getting out of grad school at the ripe old age of 22 – to the AEC industry, I have had plenty of time to reflect on where we’ve come from and where we are going. Here are my thoughts:

1. We have been, and still are, a “people business.” What that means is we live and die by the quality of our staff. And let me tell you, the change in supply over the last 38 years has been pretty dramatic. While it has never been easy to find well-rounded professionals with specialized skill sets, today it’s harder than ever to find people who have the necessary design or technical skills who can also communicate and function well as part of a team. This means firms have to dedicate time and money to staffing – and be extra-careful in how they treat their existing employees. Good people always have options. And they are sensitive and want to be shown that they are appreciated.
2. Times are good right now – really good. But believe me, we’ll see a down cycle again at some point. We always do. There are always cycles – in business and in life. The key for firm owners and managers lies in not becoming too arrogant. Once you start thinking all your success is because of what you are doing or not doing, you’re dead. Stay vigilant, look at your leading indicators, and be careful about piling on the overhead.
3. Grow or die. It has become a cliché, but it makes sense. Successfully staying small is a BS philosophy. In a nutshell, that says, “Ownership is running the firm for our benefit and we will exploit you (the employees of this small company), as long as you will allow us to.” Most good people won’t tolerate an environment of limited opportunity. Growth creates excitement and pushes people into roles where they have to develop new skills. And it also ensures that the company will be adding new people from the outside, each bringing new skills, contacts, and perspectives that can help the company adapt to a changing world.
4. Good design is worth a lot. Don’t give your time away. We have to continue to work hard to get clients and the public at-large to understand the difference between designers and builders – and that we in the AEC business (for the most part) are the ones who figure out exactly what is going to be built, whatever it is. Not contractors. And our expertise is valuable. The right design functions better, lasts longer, is cheaper to build and maintain, and looks better. All really important stuff! So don’t sell your services too cheaply. Good people cost a lot. Overhead is high. We need money to keep up with technology and money to market ourselves.
5. Architects and engineers have got to learn more about construction costs. It’s going to be our Achilles’ heel if we stay on this path of ignorance. Our lack of knowledge on cost is where contractors make us look bad to clients. All of our people need to better understand what it costs to build. And times are changing quickly. Materials and labor have gone up. A lot.

I could go on but I’m out of space. You’ll hear from me again next week!

Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.